Tracking Foreign Investments in the U.S. Pursuant to Trump's Trade Deals
According to President Trump and his administration, one of the most important elements of the trade deals they are negotiating right now is the commitments being made by foreign governments and companies to invest in the U.S. The aggregate figures mentioned in this regard have been as high as $15 trillion, $17 trillion, or $20+ trillion.
While those are some big numbers, there are questions about what this will mean in practice. To what extent are the foreign investments likely to come to fruition? I'm tracking too many other things to follow this comprehensively, but many people are doing some form of tracking these days, and I suspect others may take it up. Two things that will be interesting in this regard are: (1) how much of the investment actually takes place, and (2) how the investments work out in terms of profitability.
It would also be worth thinking about how much of the investment would have happened anyway, without the trade component. On that point, I wonder how exactly the trade deals are related to all of this. If there was money to be made with these investments, I'm not sure why they needed to be pushed along with trade pressure.
While I'm not going to do anything comprehensive here, some details on the investments to be made by Japan have just been published, and I thought I would take a look at an example of the investments being touted. The first item on the Japan list is the following:
Westinghouse
Construction of AP1000 nuclear reactors and small modular reactors (SMRs). Considering involvement of Japanese suppliers and operators, such as Mitsubishi Heavy Industries, Toshiba Group, and IHI. 【up to 100 Billion dollars】
$100 billion is certainly a lot of money, although it's not clear what that figure refers to. Does that mean the Japanese companies will provide that much money themselves? Or is that the total value of the Westinghouse investment?
Another question here is, how likely is it that this investment will go forward? Here's something from an article in Ars Technica that talks about the prospects for this and similar investment commitments:
On Tuesday, Westinghouse announced that it had reached an agreement with the Trump administration that would purportedly see $80 billion of new nuclear reactors built in the US. And the government indicated that it had finalized plans for a collaboration of GE Vernova and Hitachi to build additional reactors. Unfortunately, there are roughly zero details about the deal at the moment.
...
... Westinghouse claims that it will be involved in the construction of “at least $80 billion of new reactors,” a mix of AP1000 and AP300 (each named for the MW of capacity of the reactor/generator combination). The company claims that doing so will “reinvigorate the nuclear power industrial base.”
That’s going to take some work. As of now, there are zero nuclear reactors under construction, and the last two that were completed were enough to bankrupt Westinghouse. (It’s now co-owned by Cameco, a nuclear fuel supplier, and Brookfield Asset Management.) ...
One of the big challenges these deals will face, however, is achieving profitability. According to the Department of Energy’s latest evaluation, nuclear power is the second-most expensive source of electricity in the US, behind offshore wind, and the cost of offshore wind has fallen in recent years. Finances aren’t the only risk to this deal. None of the designs for small modular reactors developed by any of these companies has currently been approved by the Nuclear Regulatory Commission.
I have no idea how this or any of the other investments are likely to go, in terms of getting factories up and running or making them profitable. As I said above though, these would be useful things to track, if someone is looking to do some tracking.